Ag Markets Now Looking For Direction Driver
Sep 13, 2012
Good Morning! Paul Georgy with early morning comments for September 13, 2012 at 5:05 am. Grain futures are mixed in narrow trading ranges. The USDA did not lower the yield as much as trade was expecting and harvest reports out of IA and MN are coming in better than expected. Soybeans yield, on the other hand, came in less than trade estimates. With the anticipation of a reduction of harvested acres, traders quickly calculated very tight ending stocks for the year. The demand side of the USDA corn balance sheet reduced usage in exports, ethanol and feed and residual. This suggests the USDA believes prices above 8.00 a bushel is enough to curb demand. China will be auctioning 400 tmt of soybean reserves today. We should be getting the results this morning. Yesterday there was talk that China was looking for 2 to 5 cargoes of soybeans. Funds sold 12,000 contracts of corn and bought 14,000 contracts of soybeans on Wednesday. Today we have the weekly Export Sales Report and estimates are for corn 200 to 400 tmt, soybeans 500 to 800 tmt, meal 100 to 250 tmt, soyoil 5 to 20 tmt and wheat 300 to 600 tmt. Macro influences will come from the US jobless claims out at 7:30. The big news will come around 12:30 when Chairman Bernanke holds a news conference and many believe he will announce QE3. It will be a big letdown for many if no announcement is made. Look for reaction to headlines later today. Cattle futures have remained strong this week as tight supplies of market ready cattle provide ideas of higher cash this week. Cheaper corn will let feedlots add a few pounds to the cattle that need a few more days. Boxed beef values were higher with choice up .18 and select up .50. The weaker corn prices have hog spreaders coming out of the bear spread. October continues to gain on deferred. Pork cutout was down 1.70 yesterday. Ag markets are looking for a catalyst to drive prices until the next USDA report which is the quarterly stocks on September 29th.
Markets as of 5:05 AM
Dec Corn - 1/2
Nov Beans -7 1/4
Dec Wheat +2 1/4
Oct Cattle +.90
Oct Hogs -.37
Sep Dlr -.06
Sep S+P -2.75
Oct Crude +.11
Dec Gold -.50
Allendale Advanced Charts
Yesterday Nov Soybeans broke the down trend and can arguably be poised for a run at the alltime high of $17.89. We would need to see a close below yesterday’s low of $16.93 ½ in order to negate the recovery attempt to new highs in Nov Soybeans.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Corn production was recognized lower but new crop ending stocks actually rose. This report will end hopes for new highs for corn prices. USDA lowered old crop corn usage by 160 million bushels. New crop corn usage was actually raised by 25 million from its previous estimate. With a net 135 decline in demand the very slight 52 million bushel decrease in production was more than offset. This move by USDA is not unusual. On the tail end of production declines the demand side takes precedence.
This material has been prepared by a sales or trading employee or agent of Allendale Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Allendale Inc.’s Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Allendale Inc. believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.